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Big Tech’s bonanza bonanza needs a closer look

Share buybacks updates

When Microsoft put in $ 60bn this week to buy its products, it didn’t mean to be mentioned on television. This kind of money seems to be very common these days.

A recent redemption of the software company put it on pay to offset the costs for more than two years.

However, the technical redundancy bonanza requires a closer look at the moment when major new markets have opened up. Many American companies have been fired for making their money without a ransom, instead of increasing their profits and putting themselves at risk. For all but the richest professional companies, the same challenges are hard to ignore.

Buildings like this have long been criticized in Silicon Valley as an obstacle to the real goal of the technology industry: to explode in the coming big markets.

With the growth of these companies, the technology industry has become one of the largest regenerative industries. Microsoft’s share price has dropped by nearly one-third since the technical bubble formed two decades ago – even considering all the new shares offered to co-workers or those used for purchases.

It seems that, given the huge profits of Big Tech, that some companies can afford it all. Apple has spent about $ 450bn since its first release in 2013. Shareholders may one day look back and complain that they have not put a piece of the money in a new market, such as manufacturing, but few here doubt the amount of money in various markets.

Microsoft’s annual investment has doubled since Satya Nadella’s rise to prominence in 2014 – as well as its revenue.

For some, feeding their property has been a challenge. Affected funds put the entire Corporate America in the shadows. IBM, Oracle, Intel and Cisco each reduced their volume by between 40 and 50% since the technical bubble.

This has helped, in various ways, contribute to lowering the share prices that have disrupted the market. The price of Oracle’s business may have risen by a quarter of its own since the beginning of the Millennium but, due to a number of shares, its price has sold almost double.

It is hard to escape that some of these companies have ruined their fortunes, and that by failing to bet on new markets, they are slowly eating away at it. This manifests itself better at times than in others. IBM has also sold about half of its assets since the peak of technology, but its share price is about the same as it started a thousand years ago.

The failure to invest enough in the early hours of the summer season has left behind leaders, and the look is looking bright. IBM’s headquarters use dropped to $ 2.6bn last year: In contrast, Amazon invested about $ 50bn in capex in the last 12 months, most of which were stockpiles and warehouses.

Intel also saved its money at a time when the arms industry was booming. Forced to please Wall Street, it increased its redemption by about $ 40bn between 2018 and 2020, four times as much as it had spent three years ago.

Both companies have experienced major economic changes. IBM climbed off the treadmill in 2014, and reintroduced the redemption, before quitting two years ago. Intel CEO, Pat Gelsinger, has also promised to invest in the business.

For Oracle and Cisco, the serious pitfalls of software recovery are not well known. But while maintaining their responsibilities – and in the big lines – in their start-up businesses, they have worked hard to stay afloat in new technological markets.

This week, Cisco unveiled its redesign features. It developed what it wanted to grow and established a strong reason why Wall Street should see it as a software company – a growth segment that has always been in high demand. Cisco CEO Chuck Robbins acknowledged that the company could be criticized for not spending as much money in the past, and said it would no longer try to grow any stock more quickly than he expected.

Cisco still has the money to invest and will continue to repay capital share to its shareholders. Many others do not have the luxury of living if they have to spend money to stay competitive.

richard.waters@ft.com


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